Aztec Company sells its product for $160 per unit. Its actual and budgeted sales follow. May (Actual) June (Budget) July (Budget) August (Budget) Sales units 2,000 5,000 4,000 3,700 Sales dollars $ 320,000 $ 800,000 $ 640,000 $ 592,000 All sales are on credit. Collections are as follows: 24% is collected in the month of the sale, and the remaining 76% is collected in the month following the sale. Merchandise purchases cost $110 per unit. For those purchases, 60% is paid in the month of purchase and the other 40% is paid in the month following purchase. The company has a policy to maintain an ending monthly inventory of 18% of the next months unit sales. The May 31 actual inventory level of 900 units is consistent with this policy. Selling and administrative expenses of $161,000 per month are paid in cash. The companys minimum cash balance at month-end is $130,000. Loans are obtained at the end of any month when the preliminary cash balance is below $130,000. Any preliminary cash balance above $130,000 is used to repay loans at month-end. This loan has a 0.5% monthly interest rate. On May 31, the loan balance is $39,000, and the companys cash balance is $130,000. Required: 1. Prepare a schedule of cash receipts from sales for each of the months of June and July. 2. Prepare the merchandise purchases budget for June and July. 3. Prepare a schedule of cash payments for merchandise purchases for June and July. Assume Mays budgeted merchandise purchases is $279,400. 4. Prepare a cash budget for June and July, including any loan activity and interest expense. Compute the loan balance at the end of each month.